Consideration
32 In my opinion, Neptune should not be allowed to raise its new argument now. The referee made his findings clear in the preliminary final determination on which he allowed the parties to make submissions as to any corrections or how it should be revised. He ultimately did revise some miscalculations. At no point prior to late in the argument today, as Neptune conceded, had it raised this new point as one for consideration during the many hearings before the referee or even in its points of contention for the adoption hearing as to errors in the report.
33 In my opinion, Neptune should not be allowed to raise a wholly new argument that it did not put to the referee.
34 In Berry 271 CLR at 169 [29], Bell, Keane and Nettle JJ held that where a claimant bore the legal burden of establishing the amount of its loss or damage, the nature and circumstances of the wrongdoer's conduct may support an inference or presumption that shifts the evidentiary burden. They gave an example where the wrongdoer's repudiation of a contract made proof of the loss of the chance of its renewal, or an extension of its term, incapable of proof on the balance of probabilities. They said (at 170 [29]):
it is considered just that the wrongdoer should suffer the resulting uncertainty to the extent that proof to the level of a real (more than negligible) possibility is regarded as enough. The worth of the chance is then valued by a process of informed estimation.
(emphasis added)
35 Their Honours held (at 171 [32]) that, where a claimant seeks to recover the loss of a commercial opportunity of some value, greater than negligible, the valuation of that lost opportunity is ascertained by reference to hypotheses and possibilities which, though they are speculative and, therefore, not capable of proof on the balance of probabilities, can be evaluated as a matter of informed estimation. Bell, Keane and Nettle JJ held (at 136 [39]) that, while the claimant bore the evidentiary burden of proof, in the sense of bearing the ultimate burden to establish its case on the balance of probabilities, the burden of proof, in the sense of introducing evidence, is liable to shift consistently, "as one scale of evidence or the other preponderates".
36 Here the referee necessarily was dealing in hypotheses and speculation. It was clear that Neptune wished to proceed with the JVA and asserted, until my findings in the principal reasons to the contrary, that despite its repudiating conduct, the JVA continued in full force and effect. It had resisted the attempts of both Kanki to terminate the JVA and Ozmen to terminate the charterparty. There was a substantial basis in the evidence for the referee to consider that there was some possibility, despite the difficulties in the relations between the parties, that the option to renew the JVA for the second period would be exercised, albeit he found that, on the balance of probabilities, this was not likely to occur. In that context, it was open to the referee to come to the view that, from the time of Neptune's breach in late July 2017, albeit unlikely, there was more than a remote possibility that the parties, despite their difficult relationship, may have wished to continue operating the vessel and JVA because both needed to recoup expenditure they had made in the unfortunate Seadeck venture.
37 It was for the referee to determine what he found, in the preliminary final determination, was the likelihood of Kanki earning its half-share of the profit for the second period and being able to recoup on the profit guarantee in cl 10(n) of the JVA. He found that there was a one-third possibility of Kanki achieving that sum as part of his informed speculation. There is nothing apparently, let alone, manifestly, unreasonable in his finding of the quantification of the chances. The referee based that finding on evidence before him, much of which was contested. The difficulty of estimation is the very issue which the referee was required to resolve. That could not be done with any mathematical certainty, as I explained in my concurring reasons in Lopez v Gold Titan Pty Limited [2022] FCAFC 117 at [39] and [40]:
Bell P [in Searle v Commonwealth of Australia (2019) 100 NSWLR 55] held that it is not necessary for a judge, when assessing damages for loss of a chance, to nominate a particular percentage of probability to the potential for realisation of the chance. He said "to insist on this would be prone to artificiality" and that a global approach may beused. That can involve a measure of guesswork when there are too many uncertainties in play, such as working through what contracts may have been made and what profits would have been earned, as Sheller, Stein and Giles JJA held in Fightvision Pty Ltd v Onisorou (1999) 47 NSWLR 473 at 507 [147] (see Searle 100 NSWLR at 99-100 [205]-[208]).
Moreover, as Stewart J, with whom Besanko and Banks-Smith JJ agreed on this issue (at 57 [1]), held in PKT Technologies (formerly known as Fairlight.AU Pty Ltd) v Peter Vogel Instruments Pty Ltd (2020) 376 ALR 55 at 82-83 [148]-[155], a judge's assessment of damages for loss of a commercial opportunity can be set aside for an identifiable error in the approach that he or she took, but mere sparseness of reasoning in arriving at the assessment will not necessarily warrant appellate interference. That is because the judicial evaluation is one arrived at by "informed estimation" as Brennan J said in Sellars 179 CLR at 368: see too Generic Health Pty Ltd v Bayer Pharma Aktiengessellschaft (2018) 267 FCR 428 at 472 [182]-[184] per Allsop CJ, Yates and Beach JJ.
38 In my opinion, neither party demonstrated that the referee erred in arriving at his assessment of the value of the loss of the chances, and I do not consider that there is any basis to disturb it.